Commonwealth Numbered Regulations - Explanatory Statements

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CUSTOMS REGULATIONS (AMENDMENT) 1995 NO. 99

STATUTORY RULES 1995 No. 99

Issued by the authority of the Minister for Small Business, Customs and Construction

Customs Act 1901

Customs Regulations (Amendment)

Section 270 of the Customs Act 1901 (the Act provides in part that:

"(1)       The Governor-General may make regulations not inconsistent with this Act prescribing all matters which by this Act are required or permitted to be prescribed ... for giving effect to this Act or for the conduct of any business relating to Customs,..."

The regulations amend the Customs Regulations (the Regulations) as set out below.

1)       Correction of cross references to the Act in regulation 52

Section 85 of the Act provides in part that the Regulations may prescribe a fee with respect to transactions involving the movement of goods in and out of licensed warehouses. These fees are prescribed under regulation 52 of the Regulations, which also refers to the relevant provisions in the Act and the Regulations under which the particular transactions take place.

The provisions of the Act and Regulations referred to in regulation 52 relate to the entry and clearance of imported goods. These provisions have been extensively amended, and e-numbered, to introduce the legislative framework for the electronic transmission of information relating to the importation of goods to Customs. Regulation 52 has been amended to correct the crossreferences to the relevant provisions of the Act.

2)        Reporting and record keeping requirements with respect to the sale of duty free goods in outwards, off-airport duty free shops

Section 96A of the Act sets out the provisions governing the sale of goods in an outwards duty free shop. Subsection 96A(5) of the Act provides that a permission granted to a duty free shop proprietor to operate a duty free shop may be subject to prescribed conditions. Subsection 96A(12) states that where a proprietor of an outwards duty free shop does not produce proof that the goods sold in the duty free shop have been exported, the goods shall be deemed to have been entered and delivered for home consumption by the proprietor.

Subregulation 93(9) of the Regulations prescribes the manner and timing of the proof required under subsection 96A(12) in relation to outwards, off-airport duty free shops. The proprietor must provide to the Collector an electronic record of invoice numbers of copy invoices removed from the duty free goods as they exported by a traveller. This record must also be provided within 2 working days or 4 working days, depending place of departure, within the day of departure of the traveller. Subregulation 93(10) of the Regulations also requires the proprietor to produce at the close of business on the last day of each working week a list of invoice numbers included in the electronic records created under subregulation 93(9).

Conditions for the purposes of subsection 96A(5) have been prescribed in subregulation 93(7) of the Regulations. One condition set out in paragraph 93(7)(n) requires the proprietor of an outwards off-airport duty free shop to lodge a return setting out invoice numbers of invoices prepared for goods sold in an duty free shop that have not been removed from the goods upon their exportation. This return forms the basis of the calculation of the duty liability of the proprietor as the proprietor is deemed to be the owner of such goods under subsection 96A(12) of the Act because of the failure to produce the proof of export of the goods required under subregulation 93(9).

The proprietor may also be liable for duty in respect of duty free goods where the invoice has been removed upon the exportation of the goods but the electronic record has not been provided in accordance with subregulation 93(9). The return required to be lodged under the present paragraph 93(7)(n), though, does not require the inclusion of, and payment of an amount equal to the duty in respect of, invoices that have been removed but have not been provided in an electronic record in accordance with subregulation 93(9). The Regulations have been amended to require the details of these invoices to be included in the return lodged under paragraph 93(7)(n).

With respect to the time limits specified in subregulations 93(9) and (10), representations from the Australian Duty Free Operators Association indicate that these time Emits are too short and that duty free shop proprietors are experiencing difficulties in meeting them in a consistent manner. If the electronic record under subregulation 93(9) is not provided within the prescribed time Emit, the proprietor will be liable for duty in respect of the goods even though the goods have actually been exported. The time limits in subregulations 93(9) and (10) have therefore been extended.

3)       clarification of the circumstances under which customs duty may be remitted if an import entry is withdrawn.

COMPILE is the Australian Customs Services' computer system which processes import entries and refunds. Regulation 126A of the Regulations currently provides for the remission of customs duty if an import entry is withdrawn and a second import entry lodged. Regulation 126A also provides for remission of customs duty if an import entry is taken to have been withdrawn under section 71J of the Act because it has been amended.

When an entry is amended, and therefore deemed to have been. withdrawn and re-entered, COMPILE only has one import entry against which duty is calculated. If the amendment of an entry results in a different amount of customs duty becoming payable, COMPILE will automatically calculate the new amount and give notice as to whether a refund is owed or additional duty is payable.

If an import entry is actually withdrawn and a second import entry lodged, COMPILE will contain two separate records. At present, COMPILE is not capable of performing the same automatic calculation for a withdrawn and re-entered import entry as it can for an amended entry. It is therefore proposed to amend regulation 126A to omit references to withdrawn and re-entered import entries.

ATTACHMENT

Regulation 1

Regulation 1 provides that the Customs Regulations are amended as set out in the Regulations.

Regulation 2

Regulation 2 amends regulation 52 by correcting the cross-references to the relevant provisions of the Act under which the transactions, to which the prescribed fees apply, take place.

Regulation 3

Subregulation 3.1 omits and substitutes a new paragraph 93(7)(n) of the Regulations and introduces the requirement that a duty free shop proprietor include in a return the invoice numbers of invoices that have been removed upon the exportation of duty free goods but in respect of which an electronic record has not been provided in accordance with subregulation 93(9). The amount that is payable by the proprietor will then also include the amount equal to the duty in respect of goods to which those invoices relate.

Subregulations 3.2 and 3.3 effect minor grammatical corrections to subregulation 93(9) of the Regulations.

Subregulation 3.4 omits and substitutes a new paragraph 93(9)(b) into the Regulations to extend the time within which the proprietor must provide the proof of export required under paragraph 93(9)(a) to 10 working days of the duty free shop after the day of departure of the traveller. The previous distinction as to time, that was dependent on the place of departure of the traveller, has been eliminated.

Subregulation 3.5 omits and substitutes a new subregulation 93(10) to extend the time within which the proprietor is required to produce a fist of invoice numbers included in the electronic records created under subregulation 93(9) to within 21 working days after the end of a month of the duty free shop.

Regulation 4

Subregulation 4.1 omits and substitutes new subregulation 126A(1) and limits the application of regulation 126A to instances where an import entry is taken to have been withdrawn under section 71J of the Act because the entry has been amended.

Subregulation 4.2 therefore removes the reference to "second entry" in subregulation 126A(2) as a consequence of proposed subregulation 4.1.

The regulations commence on gazettal.